LinkedIn shares skyrocketed on the news that Microsoft intends to acquire it for $196 per share, and now analysts from multiple firms have downgraded the social network to Neutral or the equivalent. They’ve also set their price targets at or near $196.

Microsoft LinkedIn

LinkedIn downgraded by RBC, Goldman

RBC Capital Markets analyst Mark Mahaney upgraded LinkedIn last week to Outperform and set his price target at $160 per share, and then this week, he downgraded it to Sector Perform and raised his target again to $196 to reflect the offer price. He agrees with most analysts that this is a big positive for LinkedIn, and he calls the nearly 50% premium “very solid.” He also points out that the valuation of the deal is pretty close to the social network’s valuation right before the February correction in its stock price. Mahaney sees some big synergies in the area of Sales and Marketing

Goldman Sachs analyst Heath Terry and team downgraded LinkedIn to Neutral and set their price target at $203 per share, from their previous target of $162. They also raised their ranking of LinkedIn within their mergers and acquisitions framework, which ranks companies between one and four. A ranking of one represents a 30% to 50% probability of M&A activity, two represents a 15% to 30% probability, three represents a 10% to 15% probability, and four represents 0% to 10% probability.

Debate about the purchase price continues

Analysts are also still weighing in on whether they think Microsoft is paying too much for LinkedIn. Jefferies analyst John DiFucci and team said they expected more color on the conference call Microsoft held about the acquisition, but they were disappointed. They said they expected “something more transformative, rather than making the biggest acquisition in its history to largely support its most important business today (Office).”

They also compared the LinkedIn deal to several of Microsoft’s past deals, including Nokia, Skype and aQuantive, saying that while there was “some strategic rational” for making those acquisitions, “the valuation was suspect.” They believe most see Nokia and aQuantive as being missteps, while the Skype acquisition is harder to assess because Microsoft has succeeded of expanding the brand. They expect the LinkedIn acquisition to end up being similar to Skype with Microsoft successfully expanding the social network’s brand.

Bearish on Microsoft

Citi analyst Walter Pritchard is one of the most bearish analysts when it comes to Microsoft, as he has a Sell rating and $36 price target. While he does see strategic rationale, he doesn’t see $26 billion worth of strategic rationale. He sees most of the revenue synergies as coming in the core Office and Office 365 business through value propositions with Outlook compared to the medium- to long-term impacts in social selling.

He sees value in upselling to customers various products which include integration with LinkedIn, but he thinks that $26 billion is quite a lot to pay for something that he doesn’t believe addresses the biggest challenge for Microsoft, which is “developer relevance.”

Pritchard doesn’t believe Microsoft will look for any more acquisitions any time soon because it will take some time to integrate LinkedIn. However, he also expects “some premium” to come out of Salesforce as a result of the transaction. He said that as CEO Satya Nadella has only been at the helm for less than three years, it’s unclear what his view on acquisitions is. Past Microsoft management “only seemed to do larger acquisitions when stuck in a tough place strategically,” he observed.

Further, he said if Microsoft does become more acquisitive, he thinks it will hurt its multiple. He pointed out that Oracle, which makes more acquisitions than Microsoft, trades at a discount, and he states that it is partially for this reason.

LinkedIn shares edged lower by as much as 0.14% to $191.36, while Microsoft shares edged higher by as much as 0.25% to $49.96 during regular trading hours on Wednesday.